UK Post Office will modernise its branch network with its largest investment ever of £1.34billion as part of the government’s three-year programme, subject to state aid approval from the
EU.Royal Mail said the investment programme aims to make the Post Office network moreself-sustaining and, over time, less dependent on direct subsidy.
Under the big roll-out, around 6,000 Post Offices will be turned into new, more modern officeswhich will be carried out in several stages. In addition to the 117 new post offices currentlypiloted, around 50 new local and main branches will be added from now on until summer 2012. Thefull roll-out of up to 4,000 ‘main’ and around 2,000 ‘local’ branches across the UK will begin fromthis summer to be completed in 2015.
The 6,000 branches to be upgraded make up nearly half the total Post Office nationwide networkconsisting out of 11,800 branches. “The 5,500 branches, which will not become local or mainbranches, will retain their current operating model and will be supported by subsidy paymentsreflecting their key role in UK life,” Royal Mail explained.
The UK postal operator said the modernised offices will provide customers “a much better retailexperience including extended opening hours”.
Larger and busier post offices will be converted into main style branches with two or morecounter positions that are currently used constantly throughout the week, including a traditionalstandalone Post Office counter service and a retail counter service.
Smaller offices will become local style branches with two counter positions or less with bothpositions not fully used throughout the week.
During the rollout, Post Office will work with subpostmasters who express an interest inconverting to a new operating model. They will receive investment for their branch of up to£15,000, or up to £30,000 or up to £45,000, depending on the branch size. All changes will be madein conjunction with existing subpostmasters through an agreed communication and consultationprocess.
Paula Vennells, CEO Post Office Ltd, commented: “This is a once-in-a-generation opportunity forthe Post Office – a chance to revitalise the network and allow it to meet the needs of twenty-firstcentury customers and communities. This major investment will help Post Office Ltd address changingcustomer needs by revitalising the network, with extended opening hours and a better experience forour customers.”
The UK’s new postal affairs minister Norman Lamb stressed that the government has made acommitment that there will be no closure programme and has invested £1.34 billion to secure thelong term future of the Post Office. “However, change is needed to secure the long term future ofpost offices; the pilots are showing the new ‘locals’ and ‘mains’ models are popular with consumersand subpostmasters. The new models will make the network more financially viable and give customerswhat they want when they want it.”
The network modernisation is part of the company’s wider strategy to win new customers andgenerate new revenues.
In response to the announcement, the Communication Workers Union (CWU) warned that the rolloutcould exclude many areas from access to post office services and lead to bankruptcy for postmastersresulting in closures. The union also stressed that £1.34 billion is not new funding and is belowthe £1.7bn allocated in 2006.
The CWU criticised in particular the ‘local’ model allegedly posing a danger to the Post Officenetwork, according to the Consumer Focus study which found that 44% of customers considered therange of services being very poor or average.
CWU general secretary Billy Hayes said: “The Post Office is taking a major gamble with ourpostal service and the livelihoods of postmasters with the announcement – which is deeply one-sidedand full of spin. The voice of customers and postmasters is missing and they will bear the brunt offailures in the post office network.”
“There are serious flaws with the downgraded ‘Locals’ model which deny services to customers –not even the ability to post parcels in many cases while only making them available at tills inconvenience stores and petrol stations,” he added.
